Koninklijke Ahold Delhaize (AD) Q1 2026 earnings summary

Executive summary

• Q1 2026 net sales reached €22.3 billion, up 2.0% at constant exchange rates but down 4.3% at actual rates due to currency headwinds.

• Comparable sales excluding gasoline rose 2.0% at constant rates, with the U.S. up 1.5% and Europe up 2.6%; U.S. growth was impacted by pharmacy pricing, egg price deflation, and SNAP changes.

• Online sales grew 8.3% at constant rates, led by 14.3% growth in the U.S.; omnichannel and AI-driven services contributed.

• Underlying operating margin improved to 4.0% at constant rates, with diluted underlying EPS up 8.9% at constant rates to €0.62.

• Management transition is underway, with a clear succession plan and strong local teams ensuring continuity.

Financial highlights

• Underlying operating income was €896 million, up 8.1% at constant rates; IFRS operating income was €895 million, up 1.7% at actual rates.

• Underlying EBITDA margin increased to 8.0% from 7.8% year-over-year.

• Free cash flow was negative €330 million, mainly due to working capital timing and seasonal effects.

• Net debt increased by €768 million to €15.5 billion, driven by negative free cash flow and share buybacks.

• Share buybacks totaled €224 million for 6.3 million shares in Q1.

Outlook and guidance

• 2026 guidance reiterated: underlying operating margin around 4%, mid- to high-single-digit EPS growth at constant rates, free cash flow of at least €2.3 billion, and gross capital expenditures of around €2.7 billion.

• Dividend policy targets a payout ratio of 40–50%, with ongoing share buyback and dividend programs.

• The 53rd week in 2026 is expected to add 1.5–2% to net sales and 2–3% to underlying income.

• Quarterly performance may be more volatile due to investment phasing, but full-year performance is expected to align with guidance.

• Inflation Reduction Act expected to negatively impact U.S. pharmacy sales by ~$450 million, with no material effect on operating income.